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  • #983262
    Barb
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    • Total posts: 144
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    Hi everyone,

    How do you encourage your clients to pay on time? I have one client who is becoming quite bad at paying on time, and it’s crippling my cash flow.

    Are 7-day terms a thing of the past?

    Love to hear your thoughts on this!

    Thanks,
    Barb

    #1141422
    ark8architects
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    • Total posts: 32
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    Hi Barb,

    All too common occurrence, I say.

    Here’s what we do:-
    1. Make terms clear to the customer at the onset (we still use 7-day terms)
    2. Send hardcopy (registered) and softcopy of invoice
    3. Send email reminder the day before payment is due.
    4. Call on the day payment is due. Be firm but polite, and if there’s anything stopping them from paying. Negotiate staggered payments if it possible.
    5. Ensure to agree on a new payment date.
    6. Repeat steps 2 to 4 until payment is made.
    7. Offering alternate methods of payment does help sometimes (DD, credit, cheque, etc)

    I usually get my fellow director or book-keeper to make the follow-up calls/emails, as a “third-party” who is not personally involved tends to be more objective and MAY add a degree of “shame/guilt” to the non-paying client.

    This has worked for 95% of clients. I do recall having to finally make a house-call to collect a cheque from a client after 7 months of non-payment.

    #1141423
    PRO
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    • Total posts: 450
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    Best way I find, I don’t release the document/ service to them until they pay.

    Building and Construction Industry in Qld and NSW has a very fast method to get paid but It appears you are outside of those industries.

    If they are constantly late send them a letter stating that you will no longer be able to provide services unless they pay up front or they comply with your payment terms.

    If they are causing you stress you may be better off without them.

    #1141424
    John Romaine
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    • Total posts: 1,108
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    Get paid first.

    #1141425
    bridiej
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    • Total posts: 1,097
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    I have a three strikes rule: three late payments and the client has to pre-pay. First time today I’ve raised a pre-payment invoice for such a client…

    My terms are 7 days, although I allow 30 days for large mining firms and government organisations.

    #1141426
    rdenton
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    • Total posts: 90
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    Over the past 2 years I’ve experimented with a few different methods of getting paid on time. I have found most effective:

    1. Establish ground rules and expectations of a client before starting the job. This includes payment information and when you expect to be paid.
    2. Follow the rules originally set for the job. Give some leniance where necessary, but never let it get out of control.
    3. Ensure that you never put yourself in a position where your client has the end product without paying at least the majority of the total.

    I’ve also found that when a problem does arise, the best method is to just talk to the client. Give them a ring and ask if they could sort out the outstanding debt (in a friendly manner).

    Firing off “aggressive” or “annoying” reminders will usually result in them being deleted instantly.

    Keep a healthy level of respect between both parties.

    #1141427
    Barb
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    • Total posts: 144
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    ark8architects, post: 161541 wrote:
    Hi Barb,

    All too common occurrence, I say.

    Here’s what we do:-
    1. Make terms clear to the customer at the onset (we still use 7-day terms)
    2. Send hardcopy (registered) and softcopy of invoice
    3. Send email reminder the day before payment is due.
    4. Call on the day payment is due. Be firm but polite, and if there’s anything stopping them from paying. Negotiate staggered payments if it possible.
    5. Ensure to agree on a new payment date.
    6. Repeat steps 2 to 4 until payment is made.
    7. Offering alternate methods of payment does help sometimes (DD, credit, cheque, etc)

    I usually get my fellow director or book-keeper to make the follow-up calls/emails, as a “third-party” who is not personally involved tends to be more objective and MAY add a degree of “shame/guilt” to the non-paying client.

    This has worked for 95% of clients. I do recall having to finally make a house-call to collect a cheque from a client after 7 months of non-payment.

    Hi Kevin,

    Thank you so much for your tips on what you do – I think I’ll be implementing some of these tactics!

    Regards,
    Barb

    #1141428
    Barb
    Member
    • Total posts: 144
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    bridiej, post: 161573 wrote:
    I have a three strikes rule: three late payments and the client has to pre-pay. First time today I’ve raised a pre-payment invoice for such a client…

    My terms are 7 days, although I allow 30 days for large mining firms and government organisations.

    Hi Bridie,

    Great idea! I’m a bit worried because this client is 85% of my revenue (which I’m hoping to rectify ASAP) and if I upset them, they may go elsewhere. So stressful sometimes!

    Thanks,
    Barb

    #1141429
    Barb
    Member
    • Total posts: 144
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    rdenton, post: 161588 wrote:
    Over the past 2 years I’ve experimented with a few different methods of getting paid on time. I have found most effective:

    1. Establish ground rules and expectations of a client before starting the job. This includes payment information and when you expect to be paid.
    2. Follow the rules originally set for the job. Give some leniance where necessary, but never let it get out of control.
    3. Ensure that you never put yourself in a position where your client has the end product without paying at least the majority of the total.

    I’ve also found that when a problem does arise, the best method is to just talk to the client. Give them a ring and ask if they could sort out the outstanding debt (in a friendly manner).

    Firing off “aggressive” or “annoying” reminders will usually result in them being deleted instantly.

    Keep a healthy level of respect between both parties.

    Thanks for your feedback and advice – I agree with you about sending off email reminders and giving them a call to discuss is a much better approach.

    Thanks,
    Barb

    #1141430
    Barb
    Member
    • Total posts: 144
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    PRO, post: 161542 wrote:
    Best way I find, I don’t release the document/ service to them until they pay.

    Building and Construction Industry in Qld and NSW has a very fast method to get paid but It appears you are outside of those industries.

    If they are constantly late send them a letter stating that you will no longer be able to provide services unless they pay up front or they comply with your payment terms.

    If they are causing you stress you may be better off without them.

    It’s a bit difficult in my industry as we act as their Personal Assistant, so there isn’t really anything that we can “release”. Although I am considering some kind or pre-payment terms with such clients – it may alleviate some of these problems.

    Thanks for your advice,
    Barb

    #1141431
    KellyB
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    • Total posts: 65
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    Hi Barb, what about setting up a direct debit system? I have just done this for one of our slow paying clients using a third party provider, and it is only costing me a few dollars a month to get the funds in. I send the invoice with a note saying the amount due will be debited in 7 days, then set up the dd to happen on the due date. The client we are doing this for is happy as they don’t have to worry about paying the bills and we are getting paid on time.

    #1141432
    Barb
    Member
    • Total posts: 144
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    KellyB, post: 161676 wrote:
    Hi Barb, what about setting up a direct debit system? I have just done this for one of our slow paying clients using a third party provider, and it is only costing me a few dollars a month to get the funds in. I send the invoice with a note saying the amount due will be debited in 7 days, then set up the dd to happen on the due date. The client we are doing this for is happy as they don’t have to worry about paying the bills and we are getting paid on time.

    Hi Kelly,

    Thanks for your tip – how do you go about setting up a direct debit system?

    Regards,
    Barb

    #1141433
    KellyB
    Member
    • Total posts: 65
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    We use Ezidebit (our childrens’ childcare centre uses it which is how I found it), as the cost of setting it up directly with our bank was in excess of $500. Basically just a matter of filling out forms to get registered with them, and then getting the client to fill out an agreement (which basically states that all future fees can be collected using the system). We pay $2.20 the first time each client is set up, and them $1.10 per payment (plus % for credit card if applicable – we use the clients cheque account do don’t pay that). So far has been easy to use and saves lots of resendng invoices and follow up calls chasing payment.

    #1141434
    BYBB
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    • Total posts: 6
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    Hi Barb
    Always difficult when you work so closely with the client
    Just a thought, have you ever thought of bundling or packaging some of the services on a monthly basis – set up a direct debit that way you get the funds on a monthly basis – this way you have cash flow and eleviates your time of following up on invoices /statements etc

    #1141435
    ScarlettR
    Member
    • Total posts: 396
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    I know it’s challenging with your services but I do 50% up front, and then 50% at the end before I give them their work. As a PA, what sort of work do you do for them? If you’re doing admin tasks like filling in sheets, taking down notes etc, then don’t give over the goods until they’ve paid?

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